Reference no: EM132539337

Case: Passengers and Airlines: Friends or Foes?

Poor treatment by airlines has customers in an uproar, as the many services that go into their flight experiences continue to deteriorate. Disturbances include everything from higher fares, inconvenient scheduling activities and discourteous airline personnel before getting to the airport, then to unpleasant surprises at the airport such as overbooked flights, rude gate agents, additional baggage fees, long waits, and inaccurate information. While airlines continue to eliminate on board services, those that remain are available, increasingly, only with add-on fees. Because planes land late, departing passengers miss their connecting flights and are left stranded, often with little or no assistance from airline personnel. As to the customers' problems-the airlines don't seem to care.

How would you feel after landing, to discover your bag isn't there? Airlines lose 26 million passengers' bags annually due to theft, mishandling, and labelling errors. Even worse, imagine being stranded for eight hours awaiting take-off on a crowded runway without food, water, and air conditioning. While the overtaxed bathrooms are unfit for further use, passengers are not allowed off the plane. Little wonder that passengers are increasingly vocal, irritated, and sometimes even violent.

Airline scheduling, too, has become increasingly abusive to customers. Consider, for example, four friends who scheduled a trip together from Chicago to New York, booking airline reservations four months in advance. Before departure, the airline rescheduled their flights three times, including one assignment that separated the group onto different planes, and placed a child and mother on different flights. After each involuntary rescheduling, passengers faced the hassle of revising their personal non-airline arrangements (hotels, land travel, personal appointments, job absences, etc.), then re-revising them, then again re- re-revising them at considerable inconvenience and even added costs. In contrast, if the travellers had requested those same changes, the airline would have imposed a $50 service fee on each passenger for each rescheduling, for a total charge of $600.

As the list of service complaints grows, so too are the feelings of helplessness and frustration among customers. Little wonder, then, the number of passengers on U.S. airlines in 2009 dropped, with fewer flyers than any time since 2004, as poor economic conditions were aided by equally poor service quality in the airlines industry. With so many complaints, it is hardly a surprise that one 2010 poll shows that more U.S. passengers hold a negative, rather than positive view of airlines. Why is all this happening? The airlines say they have to cut services and start charging for "extras" to stay profitable, or else go out of business.

Some Airlines are "Getting it Right" - Unlike many carriers, better-performing airlines are proving that good service quality need not be sacrificed to remain profitable. JetBlue Airways, for example, continues to be profitable while also receiving fewer complaints than most other U.S. airlines. Among larger carriers, Southwest Airlines has demonstrated consistently that the two-high-quality service and profitability-go hand-in-hand. Southwest's service quality has attracted a loyal customer following. Passenger testimonials cite southwest's refusal to charge extra for baggage, for booking flights on the phone, or for changing flights. They receive exceptionally high ratings for baggage handling (fewer lost bags), orderly boarding practices, and consistent on-time performance. Southwest had the fewest number of consumer complaints for the most recent three consecutive years in the U.S. Department of Transportation's (DOT) official reports. Along with quality, profitability continues to grow, while other airlines are operating at a loss: "Year end results for 2009 marked Southwest's 37th consecutive year of profitability." Airline quality ratings are well-documented, using measurements from airport operations records and from customer complaints on numerous service activities. At the DOT, for example, the Aviation Consumer Protection Division gathers data on flight delays, mishandled baggage, over sales (number of confirmed passengers denied boarding), and customer complaints (on cancellations, misconnections, delays, baggage, fares, ticketing mistakes, and rude or unhelpful employees). Airlines are ranked each month, from top (fewest complaints) to bottom on each service activity, and Southwest Airlines is at or near the top consistently. Several other well-known brands, near the bottom, seem to have little interest in improving. Many passengers are left wondering, "Why don't more airlines adopt the Southwest model?"

1. How would you define quality and how is quality measured in this industry? Are some measurements more useful than others? Explain.

2. Some service activities, such as delayed departures, are not under total control by airlines, but are also affected by outside factors. Among all service activities that affect quality for customers, identify three or more that are totally controlled by airlines, and three or more that airlines cannot totally control. Should both sets of activities be included in the airlines' quality ratings? Explain.

3. Describe how process flowcharts may be helpful for methods improvement in airline service operations. What kinds of information would you hope to gain from the flowcharts?

4. Identify a major Pakistani airline that has received poor quality ratings. Who are its customers (basic target market), and what are the basic causes that led to declining quality?

5. Pakistan's airplane passengers must choose between two controversial security screening procedures: full-body image detection or probing pat-downs. How might these procedures affect customers' perceptions of airlines' services? What actions would you recommend be considered by airlines to overcome negative perceptions?

6. Suggest what might be the most effective corporate strategies to enhance the overall reputation of this industry

7. What Type of Marketing relationships are best suited in this industry? Explain

8. Do you think "Empowerment" in following levels can help airline companies to minimize customer complaints and improve their good reputation & performance

9. In case one of your company's Plane crashes, how will you manage the situation to maintain your company's good will?